Corporate Strategy

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Identification of Strategic Options by SAF Framework
Choosing a future strategic path for TOTO, The Bottom Line will be rugged. Managers
must thus consider the strategy's value and feasibility while evaluating it. First and foremost, the
management of TOTO The Bottom Line must establish a framework for evaluating the many
strategic options. Additionally, TOTO needs to choose a suitable approach for evaluating the
various tactics on its own (Kumar et al., 2022). A strategy's appropriateness, acceptability, and
feasibility may be examined and appraised using a variety of factors (SAF). According to SAF
criteria, the following section examines several TOTO The Bottom-Line methods and likely
future directives.
Suitability
Using this method, TOTO The Bottom Line will be able to expand its customer base by
reaching new demographics (Christiaens et al., 2021). It will also help the corporation expand its
reach into current areas by lowering barriers to entry. Because TOTO The Bottom Line invests in
consumer research and has a solid financial foundation, these possibilities may be achieved.
Increasing the breadth and depth of one's offering This method would need a wide range of
products. Considering the company's resources and knowledge, this is a good choice. In addition,
the organisation is always coming up with new ideas, which bodes well for the strategy's
appropriateness (Vinayavekhin and Phaal, 2020). Because the organisation has a large and
concentrated budget for marketing and communications, focused budgeting is appropriate. As a
result, TOTO The Bottom Line would be able to leave areas where it has a small share and enters
others where it has a more significant portion of the market. Strategic marketing will be made
possible by the company's research and development. TOTO The Bottom Line will also use
current systems and goods to attract new customers via marketing efforts.
Acceptability
In terms of risk, the possibility of associated financial losses and strategy's failure, the
brand should also consider ramifications carefully. The risk may be quantified by the effect on
liquidity, sensitivity analysis and stakeholder responses to determine how acceptable a plan is.
As a result, the strategy is free of financial and other hazards, and it is also acceptable to
stakeholders' replies (Vinayavekhin and Phaal, 2020). Finally, the method promises to bring in
tremendous earnings. In the grand scheme of things, the strategy seems to be sound. The
potential for loss on investment This approach seems to be a reasonable compromise. Since the
corporation has spent so much money on diversification, it cannot be confident about how
consumers will respond. Investment in strategic marketing has a minimal risk because of its high
return on investment (ROI) (Knight et al., 2020). With the promise of a greater return on
investment in marketing, it promises an increase in brand awareness and penetration and an
increase in brand recall and recognition. Finally, this plan is more likely to be accepted by
stakeholders, making it easier to execute.
Feasibility
In this scenario, it is true that the company already performs in line with its goals and has
extensive market research and understanding of wealthy individuals. This data might be used to
design a menu that caters to affluent customers. Additionally, the firm is well-positioned
financially to provide upscale menu items to a broader range of customers, allowing it to grow its
offerings. Research on the market and financial support may also use by TOTO (Wegerer and
Munro, 2018). They may do so because of the company's capacity to do extensive research about
current and future trends in the marketplace. Identifying these patterns and trends is critical if the
organisation intends to expand into new markets and industries. The firm has a solid financial
foundation; therefore, it can do market research and provide financial support. Considering this,
the corporation can enhance its marketing budget. However, for the campaign to be a success,
the corporation must make sure that all promotional initiatives are in line with customer
requirements, wants, and preferences. Again, this is feasible due to the company's commitment
to R&D and innovation (Jia et al., 2020).

Diversification Analysis
A company's diversification strategy is the extent to which it operates in a variety of
different goods and/or business sectors. If two company lines or products have comparable
manufacturing characteristics, they are said to be connected. A company's resources must be
sufficient before it can consider expanding its product line (Fuertes et al., 2020). Over the
previous decade, TOTO's attempts to diversify outside of its primary industry have failed.
Therefore an alternative strategy must be implemented. Poor diversification techniques diminish
a company's competitive edge, according to Castaldi and Giarratana (2018). Cost leadership,
differentiation, and focus have been demanded by competitive challenges. Product creation,
market penetration, diversification and market development are just a few of TOTO the bottom
line's many growth tactics. TOTO The Bottom Line gains a competitive edge through general
and intense growth techniques. TOTO must focus on expanding inside the core company that has
the highest success rate. As a strategic proposal, strengthening the firm's distribution network is
essential since it will provide the company with more control over its goods in multiple regions.
With greater control over where its things are stored, the firm can increase the ease with which
they may be discovered (Amarasinghe et al., 2021).
It has been shown that the general approach used by TOTO the bottom line to achieve
cost leadership has several advantages. These include rapid brand awareness, increased customer
base, increased consumption and sales objectives met by stressing product affordability (Moeller
et al., 2021). Although the analysis of TOTO's competitive advantage strategies emphasises cost
leadership as the primary strategy, TOTO relies on differentiation in addition to cost leadership
to establish a sustainable competitive advantage in the intensely competitive global consumer
products market. It will be easier for the TOTO to access new markets and new customer groups
if new items are introduced. TOTO’s total share of the market will grow when related
diversification occurs when the new goods and services rely substantially on internal knowledge,
resources, and capabilities. Unrelated diversification occurs when the new products and services
rely less heavily on internal resources and skills. Internal development is the ideal way for firms
to pursue related diversification because it leverages internal capabilities and avoids transaction
costs and market auctions (Chagas et al., 2021).
Due to discrepancies in segment-level data, a diversification discount might actually
result in a premium for diversity (Rahayu, 2019). TOTO’s characteristics, such as poor growth
potential and surplus capital reserves, explain the diversification discount. Although the
relationship between performance and diversification was not uniform across industry sectors,
that diversity was linked with improved effectiveness in businesses controlled by diversified
firms and negligible in industry sectors dominated by single-segment firms. When it comes to
diversification, TOTO has a choice between connected and unrelated diversification. According
to previous research, TOTO will choose related diversification if the costs of generating distinct
outputs outweigh the costs of joint production (Moeller et al., 2021). Employing senior
management teams to make business choices across several sectors and using current marketing
channels may help insurers get economic advantages (Jia et al., 2020). They are integrating
underwriting and claims services, as well as moving brand image and reputation from one
insurance firm to another, into a multi-loss adjuster strategy.
Diversification may bring certain distinct benefits of its own, mostly due to financial
synergies and improved risk reduction, which insurers might choose instead (Wegerer and
Munro, 2018). According to portfolio theory, a group of assets with only weakly associated
values may lower total risk. Having premium and claim flows that are uncorrelated may enhance
the quality of risk pooling and stabilise earnings during economic downturns in the insurance
industry. As an example, an insurer may benefit from unrelated diversification by transferring
capital to business lines that are not impacted by market contractions.
Strategic Recommendations
As a strategic proposal, strengthening the firm's distribution network is essential since it
will provide the company with more control over its goods in multiple regions (Knight et al.,
2020). TOTO’s distribution network will be strengthened, enabling it to better serve clients in
various locations by delivering the same high-quality products. More customers and deeper
penetration into target groups may be achieved by increasing the company's penetration rate. As
a result of implementing this approach, the firm expects to see an increase in the number of
people who try out and buy its items. Involving customers in the design process, the use of
innovative marketing approaches will need the use of fresh and well-informed strategic methods
of connecting with and engaging customers. In this way, consumers may also become co-owners
of the brand.
TOTO may also do this through labelling with other brands and enterprises that are
similar but not identical. The peculiarities of every market and target audience are unique.
Therefore, TOTO may better connect with a wide range of customers in various areas. TOTO
will be able to offer itself better to its target customers if it adapts to varied cultural and regional
features. This will lead to a higher affinity for the product and service and a larger likelihood of
consumers purchasing it. Another strategic proposal for TOTO is to grow into fresh locations
and marketplaces. This may be done by extending into new markets initially. This increase will
allow the TOTO exposure to new client categories. Increase the overall expenditure rate, as well
as diversify income sources. Moreover, it would supply the TOTO with growing visibility
locally as well as abroad. maintain its competitive advantage and dissuade new players from
joining the market, TOTO must improve its value network. As a result, the TOTO will be able to
retain a long-term advantage over its rivals in the local and worldwide markets and industry.
Conclusion
TOTO's performance may be improved by analysing its external and internal
environments. It is up to the company success to formulate plans that use both external analysis
and internal resources and skills if it hopes to preserve or improve its competitive position. An
external and internal environment study may benefit from using Porter's Five Forces and SWOT
analysis. In the BCG matrix, a company's external environment is analysed to determine which
markets it should target. To determine generic strategies, both the external and internal
environment studies are used. A variety of strategies may be produced to meet business goals,
but the applicability, practicality and acceptableness of a strategic alternative should be assessed
against the findings of the external and internal environment analysis.
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